It's no secret that Health Spending Accounts help small business owners save on medical expenses. However, choosing a provider can be a difficult decision because many seeking an HSA may have no prior experience with the plan and as a result, do not know what to expect. Here's a few things to look for besides just the cost(s) of the plan. Because an HSA deals directly with taxation, you want to be sure your provider complies to the rules set by CRA.
What is a Health Spending Account?
Most companies offering a Health Spending Account (HSA) may refer to them as a Health Care Spending Account (HCSA) or Private Health Services Plan (PHSP). These names are used interchangeably and usually mean one and the same thing. For ease of reading, I will refer to these plans as a Health Spending Account (or HSA) for the rest of the article.
While providers may use fancy jargon or advertise their plan differently, the base offering is still a Health Spending Account. The plan is a cost-effective way to provide health and dental benefits to employees. Simply put, health and dental benefits offered through this plan are fully tax deductible to the business and received 100% tax free by the employees. There are no premiums, hidden fees, deductibles, copay, or complex policies.
Who can use a Health Spending Account?
You are eligible for a Health Spending Account if you:
Own an incorporated business
Pay medical bills
Pay income tax / receive T4 income
It is important to note that some providers may offer Health Spending Accounts to sole proprietors. There are certain rules that apply. For example, a sole proprietor is only eligible if they have at least one arm's length employees. Olympia Benefits does not offer any HSA plans to unincorporated businesses.
How to choose your HSA provider
For the most part, Health Spending Accounts (HSA) are marketed and administered by reputable firms with a proven and documented track record. Unfortunately, the industry is unregulated and there are no barriers to entry.
Consider the following questions when you're researching your Health Spending Account options:
Do you have access to the provider's financial statements?
Are the product offerings and prices available for everyone to see? Are they keeping costs hidden and making you wait for quotes?
Does the provider have an external auditor?
Is the provider accountable for their actions? What regulatory bodies do they report to?
How is your personal data accessed and stored?
2. A Physical Office
Although most providers have moved to online claims, it is still important to know where your provider is located and how you can get in touch with them in person (if need be). How would you feel sending your family's medical history, banking information, and company cheque to a PO Box? What guarantee do you have that you will receive a reimbursement?
3. No IT infrastructure
To secure your medical, financial, and personal information, a business needs to deploy significant resources to develop their IT infrastructure. Look for the following capabilities to verify the provider's IT competence:
Secure online account access
Secure online applications
Secure online claims
Secure payment gateway
Many new, small providers do not have the resources to develop their Information Technology. Not only will your service level be compromised, but your key personal data may be at risk. A quick look at the provider's website should give you a strong indication of their competence.
4. Compliance with CRA
As you may know, getting on the bad side with the CRA is a nightmare. When dealing with a Health Spending Account, you want to be sure your business is eligible before you sign up for the plan. Some providers may have loose sign ups and allow anyone to enter into an HSA although they are not eligible. This can cause big problems down the road. Be sure to consult with a reputable provider who is willing to go in depth into your situation if you are unsure about anything. Many years in the HSA industry can be an indication of years of experience dealing with all types of businesses.
Why choose Olympia Benefits to provide your Health Spending Account?
With over 20 years of experience and 57,000+ clients, Olympia Benefits has been in the insurance industry every step of the way. Our prices also speak for themselves. The HSA Basic, Plus, and Deluxe have no administration fees. That can save you thousands. The HSA Group plan has the lowest administration fee in the industry at 8% compared to the average 10%. Don’t forget about our free eBooks, blogs, and webinars. But you don't have to take it from us, check our over 160+ 5 star reviews on Google.
Nobody wants to wait weeks for a refund. That’s why our turnaround time is an industry leading factor.
99% of claims are reimbursed within 2 business days. In most cases, it will be done in 24 hours.
3. More than 57,000 small businesses choose Olympia
Since 1997, Olympia has been offering creative health and dental solutions for small business owners. As a result, we know small business owners and their needs. We’ve been in the industry for every minor or major change, still running every step of the way with 57,000+ clients. You can trust that our prices are reflective of our service.
Next Steps: Download the Beginner's Guide to a Health Spending Account
Download this guide if you are a self employed business owner:
Download this guide if you are a small business with arm's length employees: